For the PMP Exam using PMBOK Guide 5 th Edition. PMI, PMP, PMBOK Guide are registered trade marks of Project Management Institute, Inc.

Transcription

1 For the PMP Exam using PMBOK Guide 5 th Edition PMI, PMP, PMBOK Guide are registered trade marks of Project Management Institute, Inc. 1

2 Contacts Name: Khaled El-Nakib, MSc, PMP, PMI-RMP URL: LinkedIn: Risk VS Issue Risk Risk is an uncertain event that, if occurs, has an effect on at least one project objective Issue Risk occurred 2

3 Cause A cause may be a requirement, assumption, constraint, or condition that creates the possibility of negative or positive outcomes e.g. limited assigned resources Risk Risk consists of: Defined event Probability of occurrence Impact or consequence 3

4 Tolerance VS Threshold Tolerance The ability of an organization to survive the losses associated with risks Threshold A cost, time, quality, technical, or resource value used as a parameter, and which may be included in product specifications Threat VS Opportunity Threats Negative Risk e.g. instability in market conditions may lead to fluctuation in exchange rates Opportunity Positive risk e.g. finishing WP# before 30/06 will enable deliverable review by head office line manager during his visit 4

5 Known VS Unknown Risk Known risks are those that have been identified and analyzed, making it possible to plan responses for those risks Unknown risks can not be managed proactively Contingency VS Workaround Contingency A provision in the project management plan to mitigate cost and/or schedule risk Workaround A response to a negative risk that has occurred. Distinguished from contingency in that workaround is not planned in advance of the occurrence of risk event 5

6 Risk attitudes Risk Averse A person uncomfortable with uncertainty Risk attitudes Risk Seeker Looks at risk as a challenge 6

7 Risk attitudes Risk Neutral Accept risk in case of future gain Risk attitudes Risk tolerant A person don t worry about risk, but when it occurs they appear surprised 7

8 Project Risk Management Project risk management addresses the uncertainty in the project estimates and assumptions. The objectives of the project risk management are to increase the probability and impact of positive events, and decrease the probability and impact of negative events in the project. Project Risk Management Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Control Risks 8

9 Plan Risk Management Plan Risk Management is the process of defining how to conduct risk management activities for a project. Inputs Project Management Plan Project scope statement Possible risks associated with deliverables Cost management plan How reserves are reported and used Schedule management plan How schedule contingences are reported and assessed Communication management plan How risk information is shared Stakeholders Register 9

10 Inputs Enterprise environmental factors Risk attitudes and tolerance Organizational process assets Risk categories Risk statement format Standard templates Lessons learned Project Charter TT-1: Analytical Techniques Variance analysis Root cause analysis Forecasting methods Trend analysis Reserve analysis 10

11 TT-2: Expert Judgment Project stakeholders Other project managers Senior management TT-3: Meetings Formal meetings held to define how risk management will be structures and performed for the project 11

12 Out-1: Risk Management Plan Includes but not limited to: Methodology Roles and responsibilities Risk Categories Technical External Organizational Project Management Reporting format Risk Categories 12

13 Identify Risks Identify Risks is the process of determining which risks may affect the project and documenting their characteristics. Note that identify risk is an iterative process repeated as the project progresses Inputs 1. Risk management plan Provides the guide lines for performing identify risk process 2. Cost management plan Controls can help in identify risk process 3. Schedule management plan Schedule objectives may be impacted by risks 4. Quality management plan Quality measures and metrics can help in identify risk process 13

14 Inputs 5. Human resource management plan 6. Scope baseline 1. Uncertainty associated with assumptions related to scope 2. Potential risk related to WBS components 7. Activity cost estimates 1. Activity cost estimate $1000 $1150 low inherent risk 2. Activity cost estimate $1000 $1950 high inherent risk 8. Activity duration estimates 1. Activity duration 1 3 days low inherent risk 2. Activity duration 5 18 days High inherent risk Inputs 9. Stakeholders register Interviews with various stakeholders would help in identifying potential risks 10.Project documents Assumption log Earned value reports Performance reports 14

15 Inputs 11.Procurement documents 12.Enterprise Environmental factors Personnel skills Risk attitudes 13.Organizational process assets Historical information Risk statement template Lessons learned TT-1: Documentation Review Notice that most of the previous inputs are documents developed during planning. 15

16 TT-2: Information Gathering Techniques Brainstorming Delphi Technique Interviewing Root cause analysis TT-3: Check List Analysis Going through a check list of risk categories to identify risks in each category 16

17 TT-4: Assumptions Analysis Analyze degree of confidence for all assumptions that have been made on the project to insure its validity TT-5: Diagraming Techniques Cause and Effect diagram 17

18 TT-5: Diagraming Techniques Influence diagram TT-5: Diagraming Techniques System or process Flow Charts A flowchart is a graphical representation of a process showing the relationships among process steps 18

19 TT-6: SWOT Analysis TT-7: Expert Judgment Referring to an expert with relevant experience of similar project or business 19

20 Out-1: Risk Register Risk register may include, but not limited to: List of identified risks Root cause Potential responses Risk Format There is a risk that{your risk} because{the causes of the risk} therefore{the impacts of the risk} may happen OR because{the causes of the risk} If{your risk} then{the impacts of the risk} may happen 20

21 Perform Qualitative Risk Analysis Perform qualitative risk analysis is the process of prioritizing risks for further analysis or action by assessing and combining their probability of occurrence and impact. Inputs In-1: Risk management plan In-2: Scope baseline In-3: Risk register In-4: Enterprise environmental factors In-5: organizational process assets 21

22 TT-1: Risk Probability and Impact Assessment Investigate the likelihood that each specific risk will occur Investigate the potential effect on a project objective (e.g. time, cost) TT-2: Probability and Impact Matrix Probability Impact

23 TT-3: Risk Data Quality Assessment Evaluation of the degree to which the data about risks are useful for risk management Accuracy Quality Reliability Integrity TT-4: Risk Categorization Grouping risk according to per-defined categories, such as WBS or common root cause 23

24 TT-5: Risk Urgency Assessment Risks require near-term response need urgent addressing TT-6: Expert Judgment Expert judgment is required to assess both risk probability and risk impact 24

25 Out-1: Project Documents Updates Risk Register Updates Adding further data including: Relative ranking Risk categories Cause of risk Urgency Watch lists of low-priority risks Assumptions Log Updates Perform Quantitative Risk Analysis Perform quantitative risk analysis is the process of numerically analyzing the effect of identified risks on overall project objectives 25

26 Inputs Risk management plan Cost management plan Schedule management plan Risk register Enterprise environmental factors Organizational process assets In-1: Data gathering and representation techniques Interviewing Delphi technique 26

27 TT-2: Quantitative Risk Analysis and Modeling Techniques Expected Monetary Value Analysis using decision tree TT-2: Quantitative Risk Analysis and Modeling Techniques Sensitivity Analysis Using tornado diagram 27

28 TT-3: Expert Judgment Referring to matter experts to identify potential cost or schedule impacts Out-1: Project Documents Updates Potential cost or schedule impact Probability of achieving cost and time objectives Prioritized list of quantified risks Trends in quantitative analysis 28

29 Plan Risk Responses Plan risk responses is the process of developing options and actions to enhance opportunities and to reduce threats to project objectives Inputs Risk Management Plan Risk Register 29

30 TT-1: Strategies for Negative Risks or Threats Avoid changing the project plan to eliminate the risk or the condition that causes the risk in order to protect the project objectives from its impact TT-1: Strategies for Negative Risks or Threats Transfer Transfer the risk to a third party who will carry the risk impact and ownership of the response 30

31 TT-1: Strategies for Negative Risks or Threats Mitigate Risk mitigation aims at reducing the probability and/or impact of a risk to within an acceptable threshold TT-1: Strategies for Negative Risks or Threats Accept Active acceptance: may include developing a contingency plan to execute should a risk occurs. Passive acceptance: requires no action. The project team will deal with the risk as it occurs. 31

32 TT-2: Strategies for Positive Risk or Opportunities Exploit Ensure that the risk event happens by eliminating the uncertainty TT-2: Strategies for Positive Risk or Opportunities Share Allocate ownership to a third party who has a better chance of achieving the required results. Examples: joint ventures 32

33 TT-2: Strategies for Positive Risk or Opportunities Enhance Increase the likelihood of occurrence or the impact of the of the event TT-2: Strategies for Positive Risk or Opportunities Accept Active acceptance: may include developing a contingency plan to execute should a risk occurs. Passive acceptance: requires no action. The project team will deal with the risk as it occurs. 33

34 TT-3: Contingent Response Strategies Some Reponses that are planned to be implemented if certain events occur. Triggers and warning signs must be well defined TT-4: Expert Judgment Experts can provide responses based on their knowledge 34

35 Out-1: Project Management Plan Updates Schedule Management Plan Cost Management Plan Quality Management Plan Procurement management plan HR Management Plan Schedule baseline Cost performance baseline Scope baseline Out-2: Project Document Update Assumptions log Technical documentation 35

36 Out-2: Project Document Update Risk Register Updates Risk owner Response strategy Specific actions Triggers, symptoms, and warning signs Budget and schedule activities Contingency plans Fallback plans Residual risks Secondary risks Contingency reserves Control Risks Control risks is the process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project 36

37 Inputs Project management plan Risk Register Work performance Data Work Performance reports TT-1: Risk Reassessment Identify new risks Reassess current risks Closing risks that are outdated 37

38 TT-2: Risk Audit Examine effectiveness of risk responses in dealing with identified risks and their root causes. Variance and trend analysis Monitor and control processes identify variance in many project aspects. Trends of such variance may indicate a risk event 38

39 TT-4: Technical Performance Measurements Deviation in technical implementation may indicate potential risk(s) TT-5: Reserve Analysis Reserve analysis compare the amount of contingency reserves remaining to the amount of risk remaining at any time in the project 39

40 TT-6: Meetings Risk management must be predefined topic a the periodic status meetings Out-1: Work Performance Information Used to communicate all risk related information among stakeholders 40

41 Out-2: Change Requests Recommended corrective actions Recommended preventive actions Out-3: Project Management Plan Updates Project Management plan updated according to approved change requests 41

42 Out-4: Project Documents Updates Some project document can be updated according to approved change requests Out-5: Organizational Process Assets Updates Lessons learned Project files 42

43 Question & Answers 43